Jumping from 23,100 expected units from conversions in 2022, there are 70,700 units from office-to-apartment conversions in the pipeline for 2025, according to RentCafe. This year, the adaptive-reuse sector is surging in popularity and hitting a record-breaking milestone.
Although the office-to-apartment conversion volume is growing, the carryover of pending projects from one year to the next is large, RentCafe points out. In 2024, of the 55,339 office-to-apartment conversion units in various phases of development from January, only 3,709 were delivered by December, which left 51,630 in the pipeline. Those carried from 2024 combined with the 19,021 new converted units represent a 28% year-over-year increase in the pipeline for the start of 2025.
This popular type of adaptive-reuse project accounts for almost 42% of the 168,500 apartments from future conversion projects, a jump from 38% last year. The trend reveals a shift in America’s living preferences and changes in work habits that are reshaping urban landscapes, RentCafe says.
Notably, RentCafe has tracked an increase of adaptive-reuse projects for newer buildings constructed between the 1990s and 2010s. Although only 1.27% of completed projects used newer buildings, the number increases to 7.03% for future projects.
When looking at areas with the highest rate of conversions, the New York metro comes in at No. 1 with 8,310 apartments. After leading last year, Washington, D.C., follows in second with 6,533 future apartments from office conversion. Noting an 80% increase from last year, Los Angeles is in third place with 4,388 upcoming units from conversions.
The top 10 includes:
- New York, with 8,310 units
- Washington, D.C., with 6,533 units
- Los Angeles with 4,388 units
- Chicago with 3,606 units
- Dallas with 2,752 units
- Atlanta with 2,239 units
- Minneapolis with 1,873 units
- Charlotte, North Carolina, with 1,787 units
- Cincinnati with 1,753 units
- Kansas City, Missouri, with 1,676 units
Regionally, the South takes the lead in the office-to-apartment conversion trend, with more than 22,000 units. Washington, D.C.; Dallas; and Atlanta hold the top seats in terms of upcoming apartments. The Northeast is second with more than 18,200 upcoming converted units, led by New York; Bridgeport, Connecticut, with 1,473 units; and Pittsburgh with 1,250.
The Midwest has a total of 18,038 future conversion apartments. Chicago takes the lead in the Midwest, followed by Minneapolis and Cincinnati. The West has 12,291 units to be converted, with Los Angeles in first place, followed by Phoenix with 1,634 and Denver with 1,398.
Of the top 20 metros, four recorded significant year-over-year growth in office-to-apartment conversions with each metro's pipeline more than doubling since 2024. Charlotte experienced a twofold increase with 1,787 future units. Omaha, Nebraska, also recorded a surge of 141% with an expected 1,294 conversion units.
In Jacksonville, Florida, the 1,418 future units from conversions are a staggering 150% rise, and Boston saw the greatest pipeline increase in the top 20 at 160% as the number of upcoming conversion units reached 1,167.
